Reuben Garner's questions to FGI Industries (FGI) leadership • Q2 2025
Question
Reuben Garner from The Benchmark Company LLC inquired about the primary driver of the customer pause related to tariffs, the scope of the 'China plus one' sourcing strategy, and the outlook for gross margins and operating expenses for the rest of the year.
Answer
CEO David Bruce explained the customer pause was due to uncertainty over the magnitude of initially proposed tariffs, which were later reduced, rather than a drop in consumer demand. He confirmed the 'China plus one' strategy applies to all business segments, including sanitary ware, and anticipates a significantly different global sourcing footprint by next year. Bruce and CFO Jae Chung noted that operating expenses were prudently managed due to market uncertainty. Bruce also expressed confidence in achieving gross margins in the 'upper 20s' for the second half, supported by new business programs.